Legg Mason fund manager Regina Borromeo has upped her exposure to the dollar at the expense of emerging market currencies.
Borromeo, who co-manages the £61m Legg Mason Income Optimiser fund, increased exposure to the dollar from 2.5 per cent to 19 per cent over the past three months.
Borromeo says: “The way for us to de-risk is to increase our US dollar holdings. It is a way for us to hedge against some of the price falls we have seen in China and emerging markets.
“We are positive on the US but its also a way of us to de-risk. We have been selling down some of our emerging market currency exposure – for instance we have covered our Turkish and South African exposure.”
Additionally, Borromeo has increased the fund’s duration to hold 30 year Mexican government bonds yielding over 7 per cent by switching out of short-dated bonds at 4 per cent yield.
Legg Mason Income Optimiser’s cumulative performance to 29 July 2013
|45 / 74||36 / 68||30 / 68|
Source: FE Analytics